New chapter for storied developer
Hong Kong developer Bonds Group is focusing on more offffshore projects, its chairman Anson Chan tells
One of Hong Kong’s long-established property investment firms, Bonds Group of Companies, is expanding its business towards more multi-national investment, says Hong Kong property businessman, chairman and chief executive officer Anson Chan Yiu-cheung.
The group was founded in the 1960s by his parents, Seaker Chan Shu-kui and Anita Chan Lai-ling — both philanthropists and educators. The era is considered a major stepping stone economically, and was a turning point for Hong Kong as it was categorized as one of the “Four Asian Tigers”, joining Singapore, South Korea, and Taiwan. Large local property companies were mostly established during the period.
In the late 1940s, Seaker Chan left Guangdong for Hong Kong and soon had interests in business, school buildings and social welfare. Anson Chan’s parents founded the group and under their management, mostly by his mother as his father passed away in 1973, the company focused on buying properties and leasing them out for longterm rental returns.
But since Chan took over the reins in 2008, he has been actively expanding into property development and investment, as well as financial mergers and acquisitions.
The company owns commercial and residential properties and hotels throughout prime locations in Hong Kong, the Chinese mainland, Taiwan, Canada, the US, the UK and Southeast Asia with total assets of more than HK$10 billion.
In terms of its business strategy, Chan says the company will continue to develop projects in Hong Kong and keep the head office in the city for its sound legal and financial system. But there will be a stronger focus on developing more overseas projects, rather than putting all their eggs in one basket, he says.
The company has a number of local projects underway, including a joint venture with Hong Kong’s Urban Renewal Authority, located on Chi Kiang Street and Ha Heung Road. It Shan”,
Chan says due to the Chinese mainland economy losing traction, fewer visitors from the Chinese mainland and the Legislative Council election results, the current business environment in Hong Kong is not ideal and the development prospects of the city are uncertain.
Chan points out as the real estate sector contributes to about 30 to 40 percent of the local GDP, the economy won’t improve if the industry is sluggish. He says the property tax policy imposed by local government reduces the trading volumes of properties and impacts developers such as Bonds, but it has little effect on housing prices.
Three sets of punitive taxes were introduced by the Hong Kong government since 2012: buyer’s stamp duty, special stamp duty and double stamp duty. This was to rein in speculation and discourage foreign and corporate buyers from pushing up prices.
“The government is in a dilemma state”, Chan says with a strained smile, explaining that half of Hong Kong people own properties, and it is difficult for the government to balance everyone’s interests.
“But it really depends on the government’s policy to push the economic development in Hong Kong … currently a lot of policy initiatives in the business sector are stuck in the Legislative Council and unable to proceed further.”
He also says the government should review the Hong Kong dollar, which is currently pegged to the US dollar. Depegging of the currency might be another way to regulate and adjust housing market, says Chan.
Chan says he prefers locations where the business environment is friendly. He is optimistic about investment opportunities in Canada and Singapore, where there are many Chinese people, as well as London after Britain’s vote to leave the European Union. However, he is concerned about Australia and Taiwan where governments have tightened policies in the property investment sector.
On the Chinese mainland, Chan favors first-tier cities like Beijing and Shanghai as the policies and operations are more standardized and similar to Hong Kong’s, while it requires more research and a deeper understanding of the local environment if investing in lower-tier cities.
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